The Rollback of FCC Regulations and its Ramifications

Stan Ward

April 10, 2017

When it comes to President Trump’s latest assault on Federal Communications Commission (FCC) privacy rules, what should one be doing? Relaxing or taking to the barricades? Let’s examine the thorny issue currently perplexing the privacy-loving public.

An opinion piece in USAToday tries to take the sting out of the Trump rollback of regulations, reminding readers that privacy rules aren’t going to go away, and that saying otherwise is nothing more than fear mongering, which makes for sensational headlines. Okay, why shouldn’t we be alarmed then, if not up in arms?

Personally, I’m not convinced of the fact that the Obama-era FCC regulations were anti-privacy, as the author opines, simply because it neutered the enforcement capabilities of the Federal Trade Commission (FTC). Is that reason enough for dismantling the rules?

By pointing out that in 2016 the FCC imposed new, different privacy regulations on Internet Service Providers (ISPs), not other types of internet companies, might be a valid point. I mean, why should the Facebooks and Googles of the world be allowed to sell my data with impunity when others can’t, you might ask. And what happens when consumers want to file complaints? Do they contact the FTC or the FCC? While I see the point to be made here regarding consumer confusion, something more substantive would help to settle the issue. Peter Karanjia from the law firm Davis Wright Tremaine and former FCC Deputy General Counsel chimes in:

“The fact that the privacy rules for ISPs have been nullified doesn’t necessarily mean the FCC can have no role in protecting privacy moving forward.”

All that is offered, it appears, is that the consumer must trust companies that they will still inform their customers about their privacy policies and practices, and that customers will continue to have choices about how providers use their data. I think that the customer would be better served if the privacy protections were codified and he/she would not have to opt in or out.

Another article posits that the rules rollback at the FCC may not be as damaging for consumer privacy as some civil libertarians would lead you to believe. The author tries to present a balanced, unbiased view. Regarding the FTC and FCC squabble, where broadband companies felt they were being penalized, it is pointed out by FTC Commissioner Terrell McSweeny that there could now be controversy and confusion over who’s in charge:

“In the interest of not having any difference, we created an enormous difference. Now the edge provider is under FTC jurisdiction and our approach and our enforcement authority, while the common carriers are not… So in the name of trying to address discrepancy … what’s being created here is enormous discrepancy.”

Further, as a result, the onus for auditing the data-sharing is on the consumer now that the broadband companies have been unshackled. How good has the FTC – the supposedly vaunted enforcement arm – been at reigning-in broadband abuses? Let’s take a look. How many data security and privacy cases did the FTC bring against broadband providers before the common carrier exemption of 2015, when it still had jurisdiction? Apparently, the answer is “none.”

However, this (according to an attorney) is not an argument against the FTC, but rather for the careful, cautious approach the broadband firms took when handling customer data. And the fact that the FCC’s antennae would be up, and the broadband companies would be under a microscope, augur favorably for consumer privacy. Not to mention the terrible PR that would result from the wholesale selling of data.

The Chairpersons of the FCC and FTC – respectively Ajit Pai and Maureen Ohlhausen – try to strike a conciliatory tone in a joint statement:

“We still believe that jurisdiction over broadband providers’ privacy and data security practices should be returned to the FTC, the nation’s expert agency with respect to these important subjects. All actors in the online space should be subject to the same rules, enforced by the same agency.”

I sometimes think that this whole fracas is but a diversionary sideshow, to deflect attention from the more contentious contest – that of net neutrality. The repercussions of that tilt, I think, are more dramatic to the public, and for consumers’ pocketbooks.